Fed’s Cook: Time nearing to hike rates in smaller steps

Fed’s Lisa Cook, who before said the US central bank is focused on addressing inflation that is “much too high”, reiterated on Wednesday that inflation is still too high.

Cook noted that it could soon be “time for the US central bank to take its foot off the gas when it comes to its efforts to lower high levels of inflation”.

As the Fed moves toward an “uncertain” stopping point for its rate rises, “it would be prudent to move in smaller steps,” she said, adding that “how far we go, and how long we keep rates restrictive, will depend on observed progress in bringing down inflation.”

In her remarks, Cook, one of the Fed’s newest governors, said “we have begun to see some improvement in the inflation data,” though she added that she “would be cautious about reading too much into one month of relatively favourable data” before deciding the high price pressures that have driven the Fed to act are abating.

Ahead of Fed’Chair, Jerome Powell’s speech today, the US Dollar Index reclaimed the 107 level. Some analysts expect Powell to push back against the notion that a pivot is coming soon given the uncertainty of future jobs and inflation releases.